Thanks Paul for inviting me here, and to be able to point out some major red flags we see with this program. Most of what I am going to share comes from an interview that was done with the admin of this program, Garrett Rainier.

The first red flag is this statement of his, and I quote: “The reason we selected these two processors (Liberty Reserve and Perfect Money) to begin with was to allow members the most anonymous venue of participation. Like it or not, most of the world is of an oppressive nature. Governments like control. The majority of HYIP participants don’t pay taxes on the money they earn in this arena. Governments don’t approve of this and attempt to cause problems for Members and perhaps at some point ourselves. So an anonymous entity was expected to be preferred. We personally do not want to participate with any vehicle that will cause undue scrutiny on our endeavors or those of our members.”

Any time you have an admin telling you that governments are oppressive and could cause their members and them problems, and undue scrutiny on themselves is a major red flag. If you are legal, you don’t worry about regulatory scrutiny.

They have announced that their main thrust of advertising will be on work-from-home sites, click-to-pay sites, and MLM sites. Now ask yourself, they claim to be this investment program, so why would they want to advertise on these specific sites instead of the normal investment sites? This is to keep from drawing the attention of the authorities to their program, but would if they were advertising on the financial sites.

Here is another major red flag, and I quote: “We have made some decisions regarding AP and STP. Since they are not offshore and potentially can cause challenges for us with respect to their government’s decision to allow or disallow participation in programs like ours. According to our terms of service, you are responsible to determine if your government will allow you to participate here or not. We are not required to uphold a KYC policy. However, if your government does not allow you to participate, then don’t. We would prefer you to remain out of our program than participate here and cause problems. We are not going to police this. What we are going to do is protect ourselves, this program and those that are in compliance.”

I’m sure you recognized some of the issues I said were red flags, but the major one is this: As an investment company you cannot absolve your responsibility of complying with the KYC rule and force that on the customer by fiat. Well not if you are real and legitimate. Of course any investor should look into this being legal in their country, but that also means this investment must be registered in that country as approved by the agency that oversees investments. Here in the U.S. that means the SEC (Securities and Exchange Commission).

To sell any securities allowing U.S. citizens to invest, the offerings must be registered with the SEC, and also with each State’s security agency charged with this responsibility. So all you have to do is check with EDGAR, which is the SEC’s database of all registered securities approved for sale by the SEC. Another red flag is the myth of being offshore elmiinates the need to be registered in the country from which they solicit customers. It makes no difference where the organization is registered. If they sell to one U.S. citizen, they must be registered and they are not exempt from U.S. laws or law enforcement.

When the reporter who did this interview gave his intro, he said this, and I quote: “I am a bit more enthusiastic about this program than many of the recently opened short term programs I could compare it too and would not be at all surprised if we see bigger things from this one and see it run for that bit longer than such programs usually go for.” Now what is striking about this statement is the admin in the interview says they will be around for the long haul. I guess the intervewer is not as optimistic about them as the admin is on this point.

Like everything, you must do your due diligence before investing in any program. There are enough red flags flying here to tell me this program has major issues, no matter what they say in their hyping this program. They also say this program is drawing a lot of people, but their website is barely registering with Alexa. It does not mean this cannot get traction quickly because it could. We just see a lot of hype with very little to back it up, and they have all the trappings of a classic HYIP Ponzi scheme.

They also claim this is a private placement offering, but this is limited to just 100 people if this is true. You also have to be a ‘qualified’ investor before you can participate in a true private placement. So what does “qualified’ mean? It usually means that you have a gross income of at least $250,000 and assets excluding cars of $1 million dollars. I’m sure that everyone reading this is a ‘qualified’ investor. LOL. Another major red flag.

It is your money and you can invest in anything you feel is right for you. All we can do is warn you of things we see with this program that warrant a thorough due diligence review before reaching your decision. I hope this information has been of help to all of you, and you know how to spot some red flags you didn’t know about before.